Bitcoin, a better-known cryptocurrency and arguably the current gold standard for cryptocurrency investments, gained over 1300% in 2017. More than a dozen other cryptocurrencies outperformed Bitcoin with gains ranging from 3300% up to Ripple’s astounding 36,000% gain. Since then, crypto enthusiasts have been trying to figure out the next bitcoin or best cryptocurrency they can get their hands on – and Benzinga compiled this list to help.
1. Bitcoin (BTC)
The granddaddy of all cryptocurrencies, Bitcoin was first and is the most well-known cryptocurrency on the market. It also benefits from the largest market cap and is among the most highly traded cryptocurrency, assuring liquidity in the short-term. Bitcoin is the king when it comes to retail adoption, leading all other cryptocurrencies in terms of acceptance as a payment medium.
Down significantly from its all-time high of over $20,000 per Bitcoin, BTC may have plenty of room for growth despite an increasingly crowded field of competitors.
2. Ethereum (ETH)
As the currency and platform that made “smart contracts” part of the cryptocurrency market’s vocabulary, Ethereum has seen massive gains since its introduction in 2015. Currently trailing only Bitcoin in regard to market capitalization, Ethereum has become one of the most widely discussed cryptocurrency projects in the world.
A consortium of some of the biggest names in the business, including Microsoft, Intel, Chase, and J.P. Morgan are building business-ready versions of the software that drives Ethereum. With momentum and market enthusiasm behind the Ethereum project, there’s no reason to think Ethereum has run its course and investors should consider Ethereum as part of a cryptocurrency portfolio.
3. Ripple (XRP)
Ripple diverges from much of its cryptocurrency competitors in a number of ways. Ripple is an invention of Ripple Labs, and the Ripple token is being used in high-speed and low-cost money transfers worldwide. Ripple Labs has announced a number of partnerships with leading money transfer services, with more financial market partnerships expected in the future.
Unlike many cryptocurrencies that trade on hopes and dreams, Ripple is being used in the real world today, showing signs of future adoption within the financial market community. Ripple rise in value over 36,000% in 2017, but similar gains may not be likely going forward.
4. EOS (EOS)
Another cryptocurrency with smart contracts like Ethereum, and which is gaining in popularity is EOS. EOS is credited with being the first blockchain operating system, offering decentralized applications that live on the blockchain and parallel processing, enabling faster transaction speeds and better scalability than some competitors. Transactions on the EOS network are free.
Many competitors, including Ethereum, have a transaction fee for transferring coins or tokens from one wallet address to another. EOS concluded its year-long ICO in May of this year, raising a total of $4 billion. The longer-duration ICO was done in an attempt to create an orderly market for EOS without the dramatic run-up and sudden crash common to cryptocurrencies when launched.
YTD performance for EOS is flat, with less volatility than has been seen with some competitors. Enthusiasm for the project remains high, and EOS is one of the most actively traded cryptocurrencies on exchanges.
5. Bitcoin Cash (BCH)
Bitcoin Cash, a fork of the original Bitcoin project, is one to watch, as it’s the fourth largest cryptocurrency by market cap. If forced to level criticism against Bitcoin in its current form, slow transaction speeds are among its primary challenges.
Bitcoin cash was developed using modified code from the Bitcoin project that allowed larger block sizes, promoting faster transaction times and better scalability. Although not yet as widely accepted or as widely known as Bitcoin, Bitcoin Cash is still a promising alternative to Bitcoin with an enthusiastic market following.
6. Litecoin (LTC)
Now accepted as a payment method at Overstock.com, Litecoin may also have a bright future. Long-term investors in LTC have been rewarded with up to 20x returns, although a spike in late December 2017 sent the price of LTC to over $350.
Litecoin now trades at around $84 USD, and although showing signs of consolidation remains actively traded and is consistently one of the top 10 cryptocurrencies when measured by market cap. Litecoin boasts a faster transaction time than Bitcoin, largely attributed to its use of a different type of algorithm to add transactions to the blockchain. Increased transaction speed also enhances scalability.
Final Thoughts on Best Cryptocurrencies
Cryptocurrencies are still in their formative years. If you’re new to cryptocurrencies, you may be better served by investing only risk capital and by building a portfolio of widely traded cryptocurrencies. Initial coin offerings can be tempting, particularly with the parabolic rises common to ICOs. Almost as common is a precipitous fall following the ICO.
More established currencies help to prevent some of the volatility and provide better liquidity than found with newly minted cryptocurrencies. It’s important to learn where a cryptocurrency can be traded and how big the market is for that cryptocurrency.
Many early investors have found themselves without a viable way to exit the position. If cryptocurrencies are here to stay, some very good opportunities are likely to exist among the most commonly traded currencies, while also minimizing risk due to abandoned projects or lack of liquidity.
Craving more cryptocurrency knowledge? Check out Benzinga’s guides to the best cryptocurrency exchange, how to trade cryptocurrency and best cryptocurrency wallets.